SINGAPORE – As local carmakers in China try to position themselves against Tesla in the growing Chinese electric vehicle space, Nio is well placed to capture a large share of the market, an analyst told CNBC.
The Chinese launch of electric cars on Saturday released its first sedan, the et7, with technological features that, according to self-driving, surpass the Tesla. An Et7 with a 70 kilowatt-hour battery pack starts at 448,000 yuan ($ 69,000) before subsidy.
“This is the iconic vehicle for Nine in the sedan category,” Bill Russo, founder and CEO of Automobility Limited, said Monday on CNBC’s “Street Signs Asia.” He explained that the company has already established itself as a first-class brand in the SUV category, where it is sold at a higher rate than their peer group in China.
“Now they’re moving to the sedan segment, or the premium car segment,” Russo said, adding that the et7 will compete with Tesla’s imported Model S.
“The price announced on Nio Day is, of course, quite competitive with the Model S,” he said, adding: “It’s a statement of aspiration, it’s a statement of where they hope to place their brand and under the Chinese companies to post. they are establishing that they are the premium (electric vehicle) company. ‘
Last year, Reuters reported that Tesla had reduced its Model S price in China by 3%.
Catch up with Tesla
China is already the world’s largest auto market. In its quest to become a leader in electric vehicle technology, Beijing has supported the industry with subsidies, weakened restrictions and the construction of charging infrastructure.
Homemade manufacturers of electric vehicles, including Nio, Li Auto and Xpeng, said deliveries rose last year. Government data show that sales of pure electric vehicles jumped 4.4% year-on-year from January to November, compared with a 7.6% drop in total passenger car sales in the same period. Yet their delivery numbers are less than those of Tesla.
“It’s clear that everyone is trying to position themselves against Tesla. Tesla is definitely the market leader. It has the market capitalization that everyone is so far ahead of,” Russo said. In turn, the market value of Tesla as of Monday is about $ 768.93 billion, while Nio has a market capitalization of about $ 98.63 billion.
Employees do an inspection line during a media tour through the production facility Nio Inc. 10 weather forecast for Hefei, Anhui Province, China.
Qilai Shen | Bloomberg | Getty Images
Nio is trying to ‘establish itself as the Chinese Tesla, which means you have to compare yourself as a premium EV brand in China with access to the Chinese market, which will grow significantly over the next five years,’ Russo said.
“These companies are going to grow with the market and I think Nio is well positioned to capture a lot of that,” he said, adding that the company still does not control all of its supply chain and relies on third parties for components such as autonomous drive chips.
For its part, Tesla has stepped up its efforts in China, including more promotions on New Year’s Day. The company has a factory in the country capable of producing 250,000 vehicles and has announced a new China-made vehicle, Model Y, priced at 339,900 yuan.
CNBC’s Evelyn Cheng contributed to this report.